How will I be taxed with my situation?

[Cat15]

Hi All,

This is my first time in the forum and I hope any of you can answer my query.

My application for PR is still on going and hopefully be completed in the next 6 months. I know that in order to maintain my PR is to stay in Canada for minimum 2 years within 5 years. Work is still good here in Dubai and I do not intend to settle in Canada immediately. Since there is a 1 year period for me to enter Canada once permanent residence visa is granted, I plan to enter Canada within that timeframe and stay for probably a month with friends and then go back to Dubai. Then probably actually move to Canada for good after 2 years of receiving my PR.

Do you see any prblem with my plan? How will I be taxed in the first 2 years of being out of Canada? Do I still need to file income tax return in the first 2 years of being out of Canada?

[steaky]

Make sure you don't make or maintain any residential ties at the end of your stay in Canada or else you would be consider a tax resident.

[Cat15]

Thanks Steaky! I was just thinking to visiting long lost relatives  and tour around  ...check out best place to settle in the future.

[carabelli]

Make sure you don't make or maintain any residential ties at the end of your stay in Canada or else you would be consider a tax resident.

follow up question steaky....about residential ties....

almost same question.....we are 3 in the family( me , my wife, son)

my plan is that....my son and I will just do the landing formalities return to our home country.....and comeback  after 2 years to permanently stay in canada. ( my wife will stay canada).

Now question is.... do i maintain residential ties with canada even im not physically in canada?(note: my wife stays in canada)......will i file income tax to canada for income generated in my home country??? for 2 years??

[steaky]

Yes, your wife staying in Canada becomes one of the major residential ties.

[carabelli]

Yes, your wife staying in Canada becomes one of the major residential ties.

ok....... thanks a lot dude

[Jonboy]

.....will i file income tax to canada for income generated in my home country??? for 2 years??

Does your home country have a tax treaty with Canada?  If so, you should check that for the rules regarding residency.  I agree with steaky that the fact your wife lives in Canada will likely make you tax-resident here (as long as you are not separated or divorced).  However, there may be other factors in a tax treaty you will need to consider.

If you are from a tax treaty country things are easier.  You can only be tax resident in one at a time.  If it is not a tax treaty country you will likely end up being considered as a tax-resident of both. 

Remember that when you file a tax return in Canada you can claim a tax credit for foreign tax paid against Canadian tax owing.

[carabelli]

Does your home country have a tax treaty with Canada?  If so, you should check that for the rules regarding residency.  I agree with steaky that the fact your wife lives in Canada will likely make you tax-resident here (as long as you are not separated or divorced).  However, there may be other factors in a tax treaty you will need to consider.

If you are from a tax treaty country things are easier.  You can only be tax resident in one at a time.  If it is not a tax treaty country you will likely end up being considered as a tax-resident of both. 

Remember that when you file a tax return in Canada you can claim a tax credit for foreign tax paid against Canadian tax owing.

Does your home country have a tax treaty with Canada?  If so, you should check that for the rules regarding residency.  I agree with steaky that the fact your wife lives in Canada will likely make you tax-resident here (as long as you are not separated or divorced).  However, there may be other factors in a tax treaty you will need to consider.

If you are from a tax treaty country things are easier.  You can only be tax resident in one at a time.  If it is not a tax treaty country you will likely end up being considered as a tax-resident of both. 

Remember that when you file a tax return in Canada you can claim a tax credit for foreign tax paid against Canadian tax owing.

jonboy

thanks for the reply.......follow up question...

yes my home country has a tax treaty with canada....

1. Does this mean I'm automatically not oblige to pay Income tax for the time spent in home country?
   (planing to do landing formalities come  back home country 2 yrs. come back canada to complete PR obligation)

   or I still had to file/declare the tax... (but exempted paying tax of the declared income)

-carabelli

[Jonboy]

jonboy

thanks for the reply.......follow up question...

yes my home country has a tax treaty with canada....

1. Does this mean I'm automatically not oblige to pay Income tax for the time spent in home country?
   (planing to do landing formalities come  back home country 2 yrs. come back canada to complete PR obligation)

   or I still had to file/declare the tax... (but exempted paying tax of the declared income)

-carabelli

I don't know.  It will depend on the tax treaty provisions.  If it was the UK, which I know something about, you would need to get a ruling from the CRA in Canada about your tax residence.  If the decision was that you were resident in the UK, you would file a tax return in the UK with your world income and file a tax return in Canada for your Canadian sourced income.  If the decision was that you were resident in Canada you file a tax return here reporting your world income, and file a tax return in the UK reporting your UK sourced income.

I don't know your home country or its tax laws so you need to get some advice from a tax accountant there.

My guess is that the ruling will be that you will remain tax-resident in your home country until you move here to live (so report world-wide income in your home country and only Canadian sourced income in Canada).  However, this is just a guess based on very limited knowledge of the facts.

Once you have PR and your wife is in Canada you can complete a form NR74 (If you Google NR74 it will come up first) and submit this to the International Tax Services Office in Ottawa.  They do not give hypothetical rulings so you will have to wait until after you land.

[marco-cbu]

Dear Steaky/Seniors,

 My family(wife&son) did the landing formalities in Toronto last Nov.2010 stayed for 3 weeks and went back to Dubai. I came back on July 20,2011 in Calgary to settle here, my wife is still working in Dubai and w/my son.

Question:

1) Do i still need to file an income tax though the deadline was April?
2) can i file the income tax together w/the Child tax benefits?

thanks in advance

[steaky]

Dear Steaky/Seniors,

 My family(wife&son) did the landing formalities in Toronto last Nov.2010 stayed for 3 weeks and went back to Dubai. I came back on July 20,2011 in Calgary to settle here, my wife is still working in Dubai and w/my son.

Question:

1) Do i still need to file an income tax though the deadline was April?
2) can i file the income tax together w/the Child tax benefits?

thanks in advance

1) Unless you bought a home in Calgary in 2010, you don't have to file tax return for 2010
2) If you are working in Calgary, you can file your income tax together w/ the Child tax benefits for 2011

[vanraj]

I think my question was very much the same. only difference I come from india and the guy on that forum from Dubai.
So want to know that the reply u gave him regarding no tax if u dont have any  residential ties in canada, will it be applied to me as well.
To summarize:
1) will stay with friends
2) All my family will return
3) Will definately make PR card
probably make SIN card during the first landing
4) No dependents or wife in canada without me.
5) No property in canada.

Plz reply Steaky.

[steaky]

replied you elsewhere in the forum.  no need to repeat your questions.